This post is by Vassilis Gkoumas, economist at WWF-UK. It is part of our COP16 miniseries, a collection of blogs spotlighting this year’s UN Biodiversity Conference.
As biodiversity loss becomes an increasingly salient global issue, so too does the call for a nature-positive economy, prompting us to rethink international financial systems and highlighting the transformative changes needed to meet our nature targets.
A major focus of this Conference of Parties (COP) to the Convention on Biological Diversity (CBD), currently underway in Cali, Columbia, is on implementing the targets of the Global Biodiversity Framework (GBF). The landmark agreement signed two years ago by 196 countries, often referred to as the ‘Paris Agreement for nature’, sets an ambition to halt and reverse biodiversity loss by 2030 and includes 23 targets covering different aspects of nature and society.
COP16 has attracted over 23,000 participants and as expected we have seen major progress being made by voluntary and collaborative initiatives. The Nature Positive Initiative has opened its consultation on metrics to measure the state of nature, Glasgow Financial Alliance for Net Zero and Taskforce on Nature-related Financial Disclosures (TNFD) launched its report on nature in transition planning, and the Taskforce on Nature-related Financial Disclosures announced the updated list of its 502 early adopters.
These are major steps in the right direction, however, if we are going to meet the targets of the GBF we need to transform the global financial architecture. The call for systemic change, as outlined below, is being supported by a wide range of stakeholders including Finance for Biodiversity, representing 177 financial institutions, and Business for Nature, representing more than 100 organisations.
A roadmap for the nature-positive economy
Both governments and the private sector have an important role to play in achieving the targets of the GBF and averting the nature and climate crises. This should involve directing financial flows away from economic activities that damage and destroy nature towards more nature friendly patterns of production and consumption, as well as restoring and protecting nature more effectively.
The global financial architecture prevents and disincentivises action at scale. Structural drivers of biodiversity loss in the international economic and financial system continue to create imperatives which expand extractive and ecologically harmful activities, restricting the ability of governments to pursue conservation and restoration as a policy priority. These include a lack of financial regulation to disincentivise private investment in environmentally damaging activities, and insurmountable debt burdens preventing nature-rich developing economies from prioritising nature investments.
WWF, with support from a wide range of stakeholders including UN High-Level Climate Champions Razan Al Mubarak and Mahmoud Mohieldin, have developed a Global Roadmap for a Nature-Positive Economy which identifies key pillars for action: nature-positive transition pathways, data and metrics, private capital markets, international financial institutions, and trade and governance of global commons. At COP16, they are advocating for the G20 to act on the recommendations on this roadmap and to demonstrate its commitment to the nature-positive transition.
The transition to a net zero and nature-positive economy represents one of the biggest commercial opportunities of the 21st century, both globally and in the UK. The World Economic Forum estimates that a nature-positive transition could generate opportunities worth around US$10 trillion in annual business value globally by 2030. However, to unlock these opportunities there needs to be greater clarity from policymakers on how businesses and financial institutions can contribute towards national climate and nature ambitions and targets. To address this gap the first pillar of the roadmap focuses on nature-positive sectoral pathways to guide private sector action.
Sectoral pathways will accelerate this transition
Nature-positive pathways are sets of plans or strategies, which provide guidance to both policymakers and the private sector about how different economic sectors should contribute to achieving the targets of the GBF. They do so by breaking down national and global environmental targets into sector specific targets that the private sector can operationalise.
Sectoral pathways have been critical to speeding up UK progress on climate change and can play the same role in supporting the nature-positive transition. The Path to Net Zero, developed by the Climate Change Committee alongside its Sixth Carbon Budget report, outlines, quantifies and sequences the actions each sector must take to deliver the emissions reductions necessary to contribute to the UK’s net zero target. The same is now required to help the private sector align with nature and climate targets. The proposed nature-positive pathways should be integrated into the existing net zero pathways to guide private sector and policy action towards nature-positive and net zero targets.
A clear set of sectoral pathways would enable businesses and financial institutions to better understand how they can align with and support the targets of the Environment Improvement Plan (EIP) and of the GBF. This would ensure the private sector is pulling in the same direction as the government and would provide confidence to invest in the transition.
The transition of each sector relies on the adoption of a wide range of practices and technologies, the creation of new business models and products, and on addressing impacts across supply chains. The development and deployment of these solutions at scale, within the timeframe of the EIP and the GBF, requires a clear strategy and an enabling policy framework to encourage private action.
COP16 presents an opportunity to drive action and ambition forward. Just as they did with the Sustainable Finance Roadmap for climate, the G20 must now develop a roadmap for the nature-positive economy.
WWF-UK and Aviva are calling on the UK government to develop nature-positive pathways in their latest joint report.
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